Seanad debates

Tuesday, 9 February 2010

Energy (Biofuel Obligation and Miscellaneous Provisions) Bill 2010: Second Stage (Resumed)

 

5:00 pm

Photo of Liam TwomeyLiam Twomey (Fine Gael)

The concept of the green agenda is fine until it is tested and it is in legislation such as this that we will test it. Interestingly, the Minister has said one of the objectives of the Government and other EU member state governments is to ensure there will be no adverse consequences for consumers, the environment or those living where the products needed will be grown or extracted. In reality, there will always be a clash somewhere along the line. Satisfying the green agenda may not satisfy the economic agenda and, in turn, how we produce bio-fuels. We even find that the Government has got involved in this issue because it often has had to forfeit revenue to drive the green agenda in terms of the use of bio-fuels. This was the experience of a plant in New Ross which makes biodiesel from waste products. As we know from the recent Finance Bill, the Minister wants to slap a carbon tax on biodiesel such as that produced in this plant in New Ross. In slapping a carbon tax on biodiesel produced here one will reduce the economic viability of plants such as this one. We can see, therefore, how measures taken in this area can clash. I am sure the Minister is aware of instances where major objections have been raised to the construction of plants which use biowaste to manufacture bio-fuels because the process involved creates its own difficulties. The process often involves the transportation of animal waste into a locality to make bio-fuels. One cannot keep everybody happy if one wants to improve energy security by using bio-fuel processes.

The issue highlighted by previous speakers of whether the production of bio-fuels is contributing to food scarcity is an international one. I do not know how much of an issue it is at national level. We have a large landmass that is not being farmed and would be available for growing elephant grass or willow trees that could be used in the bio-fuels sector. Therefore, we do not have a problem in that regard. Bio-fuel production is not displacing food production here such that it might contribute to an increase in world hunger. There is a lack of a clear Government commitment and policy on how to make the sector work. That is what is required, not the interim provisions we have had up to this point, which illustrate the ad-hoc way in which the sector works.

Those who have been involved in the production of green fuels have often found themselves bogged down in regulations. In some respects we are over-regulated. In framing this legislation I hope the Minister will not make that problem worse. I have had experience of this in County Wexford where a company has been producing bio-fuel from rapeseed oil for the past five years. The fuel is produced from an agricultural product and can be mixed or used on its own for transportation purposes. There were issues around the imposition of excise tax on this product from the beginning of the process which made it difficult to get production up and running. The plant I mentioned in New Ross does not use rapeseed oil, rather it uses waste material to make biodiesel. In that respect it is different but the end product is the same. It is a fuel produced in County Wexford either from agricultural products or waste material. In framing this legislation the Minister should consider its primary purpose — whether this is about energy security for Ireland, getting the sector up and running and minimising the number of regulations and volume of red tape to enable those who want to get involved in the sector to do so. That must be the primary purpose of the legislation.

We dress up this sector as being part of the green agenda but many say there are many reasons this may or may not be part of that agenda. In the overall context, there is an element of the green agenda and energy security about it, but if we really want to make the sector work, we should not kill it by over-regulation or the imposition of taxes at too high a level. The Minister should give us his opinion on this issue and indicate how he is trying within the Cabinet to influence the issue of taxation on these products. Carbon tax does not apply to oil produced from rapeseed but it will apply to biodiesel produced from waste biomass. They should be treated in the same way. We should consider not only the green agenda aspect of such production but also the energy security aspect. If we reach the target percentage where biodiesel and bio-fuels supply 8.5% of our energy needs, we could revisit that figure. The current production level is still very low.

The Minister should examine how we can produce not only bio-fuels from indigenous products but how we can mix fuels at local level. Very few companies are involved in this process. Initially, they encountered great difficulty in having their fuels mixed. They were competing with others who were supplying the same product outside the country.

We talk about air miles when it comes to destroying the environment but we should also consider fuel miles. It appears to be counter-productive to ship biodiesel and bio-fuels half way across the world as part of the green agenda when it is clear it is not part of it. We should try to produce these fuels as close as possible to the locations where they are used and the legislation should try to reflect this. I realise we are compelled by European legislation in terms of the way the process works but we should try to make it as easy as possible for these products to be produced, processed and used close to where they are produced. That may be somewhat more difficult for the Minister to achieve but it is the objective we should set.

I will be interested to hear the Minister's response to my comments. I have had a long association with the bio-fuels sector and the way bio-fuels are taking hold within the economy and the environmental agenda about which we are all talking, but I am also aware of significant problems encountered by producers. The first Minister of State with whom I discussed the issue was the former Minister of State, Tom Parlon, when he was responsible for the Office of Public Works. That is going back a long time. A number of difficulties remain within the sector, in terms of regulation and Government policy, which the Minister might help to address to make this a viable industry in the future.

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